CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 290/20
In the matter between:
SEEBED CC t/a SIYABONGA CONVENIENCE CENTRE Applicant
and
ENGEN PETROLEUM LIMITED Respondent
Neutral citation: Seebed CC t/a Siyabonga Convenience Centre v Engen Petroleum
Limited [2022] ZACC 28
Coram: Madlanga J, Majiedt J, Mhlantla J, Pillay AJ, Rogers AJ,
Tlaletsi AJ, Theron J and Tshiqi J
Judgment: Mhlantla J (unanimous)
Decided on: 20 July 2022
Summary: Petroleum Products Act 120 of 1977 — Section 12B Arbitration
Referral — Stay of Proceedings
Termination of Lease Agreement — Eviction Proceedings —
True Discretion — Concession of Facts
2
ORDER
On appeal from the High Court of South Africa, Gauteng Local Division, Johannesburg:
1. Leave to appeal is refused.
2. The applicant must pay the respondent’s costs in this Court.
JUDGMENT
MHLANTLA J (Madlanga J, Majiedt J, Pillay AJ, Rogers AJ, Tlaletsi AJ, Theron J and
Tshiqi J concurring):
Introduction
[1] This is an applicati on for leave to appeal against a judgment and order of the
High Court of South Africa, Gauteng Local Division, Johannesburg (High Court) ,1
which evicted the applicant from its retail premises . The application concerns the
question whether the High Court was entitled to grant the eviction order,
notwithstanding a pending dispute between the parties which had been referred to trial.
Background
[2] The applicant is Seebed CC, trading as Siyabonga Convenience Centre (Seebed),
a licenced retailer, which operates an Engen filling station in Robertville, Johannesburg.
The respondent is Engen Petroleum Limited (Engen), a licensed wholesaler of
petroleum products , as contemplated by the Petroleum Products Act2 (Act).
1 Engen Petroleum Limited v Seebed CC t/a Siyabonga Convenience Centre unreported judgment of the
High Court of South Africa, Gauteng Local Division, Johannesburg, Case No 37883 /2016 (28 July 2018)
(High Court judgment).
2 120 of 1977.
MHLANTLA J
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During 2009, Seebed purchased a fuel and service station business located on premises
owned by Engen. Seebed then concluded a written lease and operation of a service
station agreement (lease agreement) with Engen to enable it to operate an Engen filling
station from the leased premises. In terms of the lease agreement, the initial period of
the lease was from 1 April 2008 to 31 May 2010. The lease period was subsequently
extended, in writing, to 31 July 2017. On 24 August 2011, a written agreement was
concluded in terms of which the extension period was reduced to 31 July 2015. Seebed
alleges that th is was done pursuant to an oral agreement that the lease period would
thereafter be extended for a further five years , to 31 July 2020. However, the written
lease agreement, set to expire on 31 July 2015, had a “whole contract” clause , which,
in the ordinary course, would preclude reliance on an oral agreement.
[3] During 2010, Engen decided to introduce additional facilities at the leased
premises and brought in a Corner Bakery f ranchise, with Retsol Stores (Pty) Limited
(Retsol) being franchisor. Seebed took issue with aspects of the franchise agreement
and requested that certain changes be made to it . Engen refused to do so and ,
consequently, Seebed did not sign the franchise agreement with Ret sol. Thereafter,
Engen purported to cancel the lease agree ment and demanded that Seebed vacate the
leased premises. Seebed refused and challenged Engen’s entitlement to cancel the lease
agreement based on its refusal to sign the franchise agreement with Ret sol. Following
Seebed’s refusal to vacate the premises, Engen instituted eviction proceedings against
Seebed.
Litigation history
High Court
First eviction proceedings
[4] In September 2012, Engen launched proceedings in the High Court for the
eviction of Seebed from the premises (first eviction proceedings). The application was
opposed on the grounds that : (a) Seebed had the right to elect whether it wished to
establish the Corner Bakery; (b) Engen and Ret sol had made fraudulent
MHLANTLA J
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misrepresentations about the profitability of the Corner Bakery; and (c) no feasibility
studies had been conducted on the introduction of the Corner Bakery concept at Engen
service stations. Seebed’s defence was that, due to Engen’s fraudulent
misrepresentations, Engen could not rely on a breach of the extension agreement as a
basis for cancellation and eviction. It must be noted that, i n its affidavits filed in
June 2014 and supplemented in August 2 015, Seebed did not allege that it h ad a
reasonable or legitimate expectation that the lease would be extended to 31 July 2020,
nor did it allege that Engen had been guilty of unfair or unreasonable contractual
practices, as contemplated in section 12B of the Act.3
[5] The matter came before Meyer J in May 2016. 4 During the hearing, t he
High Court explored with Seebed’s counsel the implications of the contention that the
alleged fraudulent misrepresentations precluded Engen from relying on a breach of the
extension agreement as a basis for cancellation . Seebed’s counsel responded that the
3 Section 12B concerns referral of an alleged unfair contractual practice to arbitration a nd provides:
“(1) The Controller of Petroleum Products may on request by a licensed retailer alleging an
unfair or unreasonable contractual practice by a licensed wholesaler, or vice versa,
require, by notice in writing to the parties concerned, that the parties submit the matter
to arbitration.
(2) An arbitration contemplated in subsection (1) shall be heard—
(a) by an arbitrator chosen by the parties concerned; and
(b) in accordance with the rules agreed between the parties.
(3) If the parties fail to reach an agreement regarding the arbitrator, or the applicable rules,
within 14 days of receipt of the notice contemplated in subsection (1)—
(a) the Controller of Petroleum Products must upon notification of such failure,
appoint a suitable person to act as arbitrator; and
(b) the arbitrator must determine the applicable rules.
(4) An arbitrator contemplated in subsection (2) or (3)—
(a) shall determine whether the alleged contractual practices concerned are unfair
or unreasonable and, if so, shall make such award as he or she deems
necessary to correct such practice; and
(b) shall determine whether the allegations giving rise to the arbitration were
frivolous or capricious and, if so, shall make such award as he or she deems
necessary to compensate any party affected by such allegations;
(5) Any award made by an arbitrator contemplated in this section shall be final and binding
upon the parties concerned and may, at the arbitrator’s discretion, include any order as
to costs to be borne by one or more of the parties concerned.”
4 High Court judgment above n 1 at para 2.4.
MHLANTLA J
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extension agreement was tainted with misrepresentation and , consequently, invalid.
Seebed’s counsel further stated that, since the extension agreement was invalid, the
original lease agreement, which subsisted between 1 April 2008 and 31 May 2010, was
applicable. In terms of the original lease agreement, if the parties failed to agree on the
extension of the lease agreement, the agreement would remain in operation o n a
month-to-month basis , terminable on one month’s written notice. Seebed’s counsel
contended that, since the agreement that sub sisted between the parties was o n a
month-to-month basis, it was up to either of the parties to make an election to continue
with the agreement or to terminate it. However, the implications of that election would
be a “fight on its own”.
[6] On 26 May 2016, the High Court referred the application to trial because of the
factual disputes regarding the alleged fraudulent misrepresentations.
[7] Five days after the Court’s d ecision to refer the application to trial, that is on
31 May 2016, Engen gave Seebed one month’s notice to vacate. Seebed refused to do
so.
[8] After the referral to trial, Seebed decided to amplify its case in the pleadings. On
24 August 2016, it filed a counterclaim, wherein it alleged that the extension of the lease
period to July 2017, for which Seebed had already paid R1 995 000, had been truncated
to July 2015, based on Engen’s oral undertaking that the lease period would be extended
for another period of five years ending in 2020. On these grounds, Seebed contended
that it had a reasonable expectation that the lease agreement would be extended to
31 July 2020. Seebed thus alleged that it ha d a right to remain in occupation of the
leased premises until July 2020.
[9] In October 2016, Engen launched the second eviction proceedings, relying on
the concessions made on Seebed’s behalf that the right to terminate was on one month’s
notice. I will revert to what happened in the second eviction proceedings later.
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[10] The trial in the first eviction proceedings w as set down for hearing on
15 May 2019. However, and presumably because judgment at that time was pending
in the second eviction proceedings, which had been heard on 19 March 2019, the parties
agreed that the first eviction proceedings be postponed sine die.
Second eviction proceedings
[11] Seebed opposed the second eviction proceedings on the grounds that: (a) the first
eviction proceedings were pending and had been referred to trial; (b) there were material
disputes of fact between the parties and, therefore, the second eviction proceedings
should be referred to trial and consolidated with the first eviction proceedings; (c) in the
first eviction proceedings, Seebed had filed a counterclaim, in which it asserted its right
to remain in occupation of the leased premises until July 2020; and (d) the concessions
made by Seebed, upon which Engen relied to institute the second eviction proceedings,
were concessions of law and not fact, and thus were not binding.
[12] On 25 April 2017, Seebed made a request to Engen for its consent to stay the
second eviction proceedings, pending a referral of the dispute to arbitration in terms of
section 12B of the Act . This request was refused. Following this, on 30 June 2017,
Seebed referred alleged unreasonable or unfair contractual practices to the Contr oller
of Petroleum Products (Controller) in terms of section 12B. This was the first instance
where Seebed made allegations of unfair or unreasonable contractual practices. On
23 August 2017, Seebed filed an application to stay the second eviction proceedings,
pending the section 12B arbitration.
[13] Seebed’s rationale for launching the application to stay the second eviction
proceedings was based on its assertion that the arbitrator’s powers were wide enough to
include a determination on it s right to occupy the leased premise s until 2020. Seebed
contended that the High Court was not required to decide a claim in terms of
section 12B, and therefore was not in a position to assess the prospects of success of the
section 12B referral. Engen opposed the application to stay the second eviction
proceedings.
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[14] The second eviction proceedings were set down for hearing o n
4 December 2017, but were postponed, presumably, to allow the stay application to be
adjudicated.
[15] On 5 July 2018, the stay application came before Victor J. On the next day, this
application was dismissed on the basis that the High Court’s jurisdiction to assess the
fairness, reasonableness and equitability of a petroleum contract or part thereof is not
ousted by a section 12B referral. The High Court further held that it was well-placed to
hear and decide the second eviction proceedings, in the light of its inherent jurisdiction
to interpret contracts and the need to bring the matter to finality without further delay.
[16] On 3 August 2018, following the dismissal of the stay application, Seebed filed
a second supplementary answering affidavit in the second eviction proceedings. It
sought to place before the High Court its allegations on the extension of the agreement,
and those relating to unfair and unreasonable contractual practices. Seebed also wanted
to place before the High Court the fact that the first eviction proceedings had been
referred for trial, which had not yet commenced. It submitted that, since the issues in
the first evic tion proceedings were inextricably linked to the issues in the second
eviction proceedings, the matters should be consolidated and heard together. Further,
Seebed held the view that it was pertinent for the High Court to be apprised of the issues
to be decided in the first eviction proceedings, in the light of the fact that a determination
that Seebed was in lawful occupation of the leased premises in the first eviction
proceedings would be dispositive of the second eviction proceedings by necessary
implication.
[17] Engen opposed the admission of the second supplementary answering affidavit
on the following grounds: (a) the supplementary answering affidavit was filed
10 months after Engen filed its replying affidavit, and no consent was sought from
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Engen;5 (b) the supplementary answering affidavit did not raise new issues that were
not already on record and before the High Court;6 (c) there were no allegations
regarding the alleged unreasonable or unfair contractual practices in Seebed’s plea and
counterclaim in the pending trial of the first eviction proceedings; and (d) there was no
justification for accepting Seebed’s supplementary answering affidavit, since the issues
it raised: did not serve the interests of justice or relate to recent developments; were not
conducive to the expeditious resolution of the matter; and d id not constitute new
information.7 On 25 September 2018, Engen filed a reply, in the event that Seebed’s
affidavit was allowed.
[18] On 19 March 2019, Mosam AJ considered t he second eviction proceedings and
judgment was delivered on 31 July 2019. The High Court refused to grant Seebed leave
to file the second supplementary answering affidavit on the basis that Seebed had not
sought consent to do so from either Engen or the High Court before filing, and it had
not proffered a satisfactory explanation for failing to place the information in the
supplementary answering affidavit before the Court at an earlier stage.8
[19] On Seebed’s contention that the second eviction proceedings should be referred
to trial, the Court accepted that the alleged unfair and unreasonable contractual practice
was an issue to be decided during the trial and best left to the section 12B inquiry.9
However, the High Court held that the central question in the second eviction
proceedings was not one of reasonableness, equity, or fairness, but rather one of
enforcement of the terms of the contract.10 The High Court held that fairness and
reasonableness were not self -standing substantive rule s that the Court could use to
5 Id at para 3.
6 Id at para 4.
7 Id at para 5.
8 Id at paras 9-10.
9 Id at paras 18-9.
10 Id at paras 23.
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intervene in a contractual relationship and determine the case. 11 It held that doing so
would lead to untenable legal uncertainty. 12 The High Court also rejected Seebed’s
lis pendens defence and held that the causes of action in the two eviction proceedings
were distinct, in that the first one was based on a breach of contract, while the second
was based on the version advanced by Seebed in the first eviction proceedings.13
[20] On the question whether Engen had the right to terminate the lease agreement
and to evict Seebed from its premises, the High Court held that Engen was entitled to
cancel the lease agreement. 14 In its reasoning, the High Court accepted Engen’s
submission that Seebed had made a factual concession in the first eviction proceedings
that the contract that subsisted between Engen and Seebed was on a month -to-month
basis.15 Accepting Engen’s reliance on this concession, the Court held that Engen had
the right to terminate the agreement on one month’s notice, which it had given.16
[21] The High Court further recalled that Seebed had raised the issue of the alleged
fraudulent misrepresentation on the part of Engen, when the latter made the alleged oral
undertaking that it would extend the contract to 2017, as one of the bases for asserting
Seebed’s right to remain in occupation of the leased premises. 17 The Court reasoned
that, even if it were accepted that the oral agreement to extend the lease to 2017 was
rooted in misrep resentation, the agreement would have been void ab initio, meaning
that, at best for Seebed, it s right to occupy the leased property subsisted only until
31 July 2017.18 In the result , the High Court upheld Engen’s application and granted
an eviction order with retrospective effect from 31 July 2017.19
11 Id at paras 21-2.
12 Id.
13 Id at paras 24-6.
14 Id at para 29.
15 Id at paras 27-33.
16 Id.
17 Id at para 34.
18 Id at paras 34-8.
19 Id at para 40.
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[22] Seebed sought leave to appeal to the Full Court of the High Court. That
application was dismissed.
Supreme Court of Appeal
[23] An application for leave to appeal to the Supreme Court of Appeal suffered a
similar fate. Seebed then applied to the President of the S upreme Court of Appeal for
a reconsideration in terms of section 17(2)(f) of the Superior Courts Act. 20 This was
refused. Seebed has now approached this Court for leave to appeal.
In this Court
[24] This Court issued directions instructing the parties to file written submissions on
the effect of Crompton21 on their application. The parties filed the written submissions,
and the matter is determined without oral argument.
Issues
[25] This Court must determine whether its jurisdiction is engaged and, if so, whether
leave to appeal should be granted. If leave to appeal is granted, the merits of the appeal
must be determined.
Parties’ submissions
Applicant’s submissions
[26] On jurisdiction, Seebed raises the following grounds: (a) there are conflicting
judgments on the legal issue in question; (b) this matter concerns the proper
interpretation of legislation through a constitutional prism, in so far as freedom of trade
is concerned; and (c) this matter requires a pronouncement on the correct application of
20 10 of 2013.
21 Crompton Street Motors CC t/a Wallers Garage Service Station v Bright Idea Projects 66 (Pty) Ltd [2021]
ZACC 24; 2022 (1) SA 317 (CC); 2021 (11) BCLR 1203 (CC).
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the principles of fairness and reasonableness in relation to the Act , which would
promote legal certainty.
[27] On the merits, Seebed submits that the present case is distinguishable from
Crompton, both in fact and in law. On the facts, Seebed submits that the parties in
Crompton agreed that the franchise agreement had terminated by effluxion of time,
whereas this was not the case in this matter. Instead, Engen purported to cancel the
lease based on Seebed’s refusal to sign a franchise agreement with Retsol. Eviction
proceedings then followed but were referred to trial and a hearing has not yet been held.
Seebed contends that this is distinguishable from Crompton, in which the eviction order
had been granted. The key difference, therefore, is that in Crompton, the retailer’s case
was that section 12B ousted the High Court’s jurisdiction, whereas in this case, Seebed
argues that Engen’s purported cancellation was, in itself, an unfair or unreasonable
contractual practice. This was also the case in respect of its failure to extend the
contract.
[28] Seebed also argues that the underlying cause for the eviction has fallen away as,
on 31 March 2017, Engen announced its cancellation of the franchise agreemen t with
Retsol. Seebed submits that after the first eviction proceedings were referred to trial to
resolve material disputes, Engen again instituted eviction proceedings. Seebed avers
that this too distinguishes the case from Crompton, as the dispute of f act required a
referral to oral evidence. It was only during the second eviction proceedings that Seebed
sought a stay of proceedings. However, it had addressed the issue of the unfair or
unreasonable contr actual practice s in its answering papers and sought a stay for the
issue to be addressed following the resolution of the factual dispute.
[29] On the law, Seebed submits that its section 12B argument is different to that
advanced by the retailer in Crompton. Its core argument is that, in terms of the Act, the
standard of reasonableness and fairness prevails, irrespective of whether the dispute
between the retailer and wholesaler is subject to statutory arbitration or ordinary
litigation. It submits further that the High Court erred in finding that this standard was
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not applicable where a dispute emanated from a contract. This, so Seebed submits, is
not in accordance with this Court’s decision in Crompton. If the High Court accepted
jurisdiction, it should have applied the correct standard of fairness and reasonableness.
Seebed argues that nothing in its conduct precludes it from acting in terms of the
contract and selling the franchise to recoup its losses, as it has not breached any of the
terms. It emphasises the nature of unequal bargaining power between parties in the
petroleum products industry. In closing, Seebed argues that there is one crucial point
to section 12B, which is that it is not geared towards compelling arbitration but towards
imposing a standard of equi ty between parties. Consequently, the High Court should
not have granted the relief sought by Engen.
Respondent’s submissions
[30] Engen submits that this matter does not raise any constitutional issue or arguable
point of law of general public importance. Engen refutes Seebed’s allegation that there
are conflicting judgments, and submits that Seebed simply failed to follow precedents.
Additionally, it submits that, in any event, the relief sought by Seebed has been rendered
moot, on account of the fact that Seebed is no longer entitled to occupy Engen’s
premises on the strength of any of its versions, due to the effluxion of time.
[31] Regarding the merits, Engen submits that Crompton, far from supporting
Seebed’s argument, dismantles it. It submits that Seebed has failed to appreciate the
nature of the proceedings, in that the matter referred to trial had no bearing on the second
eviction proceedings. Furthermore, Seebed is seeking leave to appeal against the
eviction order and , in the alternative, a stay of proceedings. The stay was brought in
the second proceedings, but Victor J dismissed it, and there was no appeal against that
dismissal. This means Engen was entitled to the eviction order as no stay application
was pending befo re the High Court. Relying on this Court’s decision in
Former Way Trade,22 Engen submits that, in any event, a request for referral to a
22 Former Way Trade and Investment (Pty) Ltd v Bright Idea Projects 66 (Pty) Ltd t/a All Fuels [2021] ZACC 33;
2021 (12) BCLR 1388 (CC).
MHLANTLA J
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section 12B arbitration does not oust the High Court’s jurisdiction. T he High Court
was entitled to exercise a discret ion in terms of section 6 of the Arbitration Act23 to
decide whether to grant such a stay. Therefore, the outcome of the request for a stay
was not a foregone conclusion. To add to this, Seebed entirely failed to meet the
requirements of section 6 of the Arbitration Act for a stay. Had such an application
been entertained, it would have been baseless and a waste of judicial resources. Engen
highlights that the matter had been ongoing for a long time and, as such, it was entitled
to finality.
[32] Engen points out that the lapse of a contract, as in Crompton, cannot be
considered a contractual practice for present purposes. In addition, any section 12B
referral could not give the Controller authority to compel the parties to enter into a
further ag reement. Engen submits that the issue of Seebed’s entitlement to sell the
service station is raised for the first time in this Court and, on Seebed’s own version,
the lease was on a month -to-month basis and, as a result, the provision it seeks to rely
on does not apply to it. Accordingly, Seebed is not entitled to any compensation. If
anything, given the date of the expiry of the lease agreement, Seebed’s counterclaim
has also prescribed. Therefore, Engen submits that there are no reasonable prospects of
success and the application must fail.
23 42 of 1965. Section 6 concerns the stay of eviction proceedings where there is an arbitration agreement and
states:
“(1) If any party to an arbitration agreement commences any legal proceedings in any court
(including any inferior court) against any other party to the agreement in respect of any
matter agreed to be referred to arbitration, any party to such legal procee dings may at
any time after entering appearance but before delivering any pleadings or taking any
other steps in the proceedings, apply to that court for a stay of such proceedings.
(2) If on any such application the court is satisfied that there is no suf ficient reason why
the dispute should not be referred to arbitration in accordance with the agreement, the
court may make an order staying such proceedings subject to such terms and conditions
as it may consider just.”
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Analysis
Jurisdiction
[33] This Court is, in terms of section 167(3)(b) of the Constitution, empowered to
decide matters of a constitutional nature and any other matter that raises an arguable
point of law of general public importance that ought to be considered by it. Once
jurisdiction is established, it must also be in the interests of justice to grant leave to
appeal.
[34] In this matter, it is alleged that Seebed has been denied its section 34 right to
access the courts, in that it has been evicted in circumstances where the issues raised in
the first eviction proceedings have not yet been ventil ated and determined by the
High Court. This is a constitutional issue. Consequently, this Court’s jurisdiction is
engaged.
Leave to appeal
[35] The next question is whether it is in the interests of justice to grant leave to
appeal. In order to determine whether leave should be granted, we must consider the
prospects of success and whether it is in the interests of justice for this Court to entertain
the matter. I will consider the merits of the case in order to answer the question whether
there are prospects of success.24
[36] Before considering this is sue, I will deal with the parties ’ response to the
directions on the applicability of Crompton to their matter. It is apposite to first outline
what that case was about. Crompton concerned a dispute about the extension and/or
renewal of a franchise agreement that had lapsed and eviction proceedings that had been
launched pursuant to the lapsed franchise agreement. While the eviction proceedings
24 Fraser v Naude [1998] ZACC 13; 1999 (1) SA 1 (CC); 1998 (11) BCLR 1357 (CC) at para 7; Brummer v Gorfil
Brothers Investments (Pty) Ltd [2000] ZACC 3; 2000 (2) SA 837 (CC); 2000 (5) BCLR 465 (CC) at para 3;
De Reuck v Director of Public Prosecutions, Witwatersrand Local Division [2003] ZACC 19; 2004 (1) SA 406
(CC); 2003 (12) BCLR 1333 (CC) at para 3; and Radio Pretoria v Chairperson, Independent Communications
Authority of South Africa [2004] ZACC 24; 2005 (4) SA 319 (CC); 2005 (3) BCLR 231 (CC) at para 22.
MHLANTLA J
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were still pending, the retailer lodged a request for the dispute to be referred to
arbitration with the Controller in terms of section 12B , and filed an application to stay
the e viction proceeding s, pending the outcome of the arbitration . The High Court
dismissed the application for a stay and issued an order evicting the applicant from the
premises. This prompted the applicant to approach the Supreme Court of Appeal and,
upon refusal of that application, this Court.
[37] This Court, in Crompton, had to determine whether a High Court, faced with an
application to stay proceedings, was obliged to stay the proceedings pending the
section 12B arbitration, and whether a failure to do so was akin to usurping the functions
of the Controller and denying the retailer its right to access a specialised statutory
dispute resolution mechanism, and thereby infringing on its section 34 right to access
of courts. This Court held that the High Court was not precluded from adjudicating a
matter that had been referred to arbitration in terms of section 12B, as section 12B did
not grant exclusive jurisdiction to arbitrators in such disputes. It was clarified that the
parties were at liberty to elect to refer their disputes to arbitration or to litigate in the
High Court. This Court further held that the High Court had a discretion to dismiss a
stay application on the strength of compe lling reasons and that the High Court was
required to consider several factors – such as the purpose and benefits of arbitration,
judicial resources, and the implications of a premature assessment of the outcome of
arbitration – before refusing to stay the proceedings. Ultimately, the retailer in
Crompton was unsuccessful in its appeal and the High Court’ s order of eviction was
upheld.
[38] Having considered the submissions of the parties and the facts in Crompton, I
agree with Seebed that this matter is distinguishable from Crompton. The first
distinction is that Crompton was largely centred around the extension and/or renewal
of a franchise agreement that had expired by the effluxion of time before the retailer
invoked the section 12B arbitration , while the dispute in this matter , especially in
respect of the first eviction proceedings, arose after the purported cancellation of a lease
agreement before its expir y date. However, this situation is different in respect of the
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second eviction proceedings, as the lease was terminated on one month’ s notice, long
before the invocation of section 12B. Another distinction is that Crompton concerned
a stay of proceedings pending an arbitration in terms of section 12B. The present matter
is not just dealing with an application for the stay of the proc eedings on account of a
section 12B arbitration referral, it also involves pending High Court proceedings
concerning the same parties, dealing with the operation and/or termination of the lease
agreement, and the question whether Seebed has a right to occupy the leased premises.
In the light of this, the cases are indeed distinct.
[39] Regarding the question whether it is in the interes ts of justice to grant leave, it
must be determined whether the High Court erred in granting the eviction order. The
first question is whether the High Court erred in refusing to allow Seebed to file its
second supplementary answering affidavit. In this regard, t he first consideration is
whether this Court has the powers to interfere with the discretion of the High Court. In
order to answer this question , I must determine whether the High Court’s decision to
reject Seebed’s supplementary answering affidavit amounts to a true discretion. This
question can only be answered in the affirmative, as permission to file further affidavits
after the replying affidavit has been filed is always a matter for the discretion of the
court.25
[40] It is trite that this Court has limited powers to interfere with the High Court’s
exercise of a true discretion.26 This Court, in Trencon,27 said the fo llowing in this
regard:
“A discretion in the true sense is found where the lower court has a wide range of
equally permissible options available to it. This type of discretion has been found by
this Court in many instances, including matters of costs, da mages and in the award of
25 Sealed Africa (Pty) Ltd v Kelly 2006 (3) SA 65 (W) at para 4.
26 Ferguson v Rhodes University [2017] ZACC 39; 2018 (1) BCLR 1 (CC) at para 21.
27 Trencon Construction (Pty) Limited v Industrial Development Corporation of South Africa Limited [2015]
ZACC 22; 2015 (5) SA 245 (CC); 2015 (10) BCLR 1199 (CC).
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a remedy in terms of section 35 of the Restitution of Land Rights Act. It is “true” in
that the lower court has an election of which option it will apply and any option can
never be said to be wrong as each is entirely permissible. In contrast, where a court
has a discretion in the loose sense, it does not necessarily have a choice between equally
permissible options.”28
[41] Having reached the conclusion that the High Court’s decision amounts to a true
discretion, this Court may only interfere with the High Court’s discretion if it is apparent
that the High Court: did not exercise its discretion judicially; was influenced by the
wrong principles; misdirected itself on the facts; and/or “reached a decision which in
the result could not reasonably have been made by a court properly directing itself to
all the relevant facts and principles”.29
[42] In this case, no such basis for interference exists, as the High Court’s decision
was founded on the following factors: first, no preceding application was brought by
Seebed to seek an indulgence from the High Court to file a supplementary answering
affidavit; and, second, the supplementary answering affidavit was, in any event, filed at
a considerably late stage of the proceedings, without an adequate explanation proffered
by Seebed for the lateness. In James Brown & Hammer,30 the Appellate Division aptly
held that a party who tenders an affidavit late must seek an indulgence from the Court.31
The affidavit cannot be filed as of right. The Court further held that such a part y must
“advance his explanation why the affidavit is out of time and satisfy the Court that,
although the affidavit is late, it should, having regard to all the circumstances of the
case, nevertheless be received”.32 Implicitly, where the Court has not been satisfied by
the explanation, as is the case with the High Court in this matter, the Court has the
discretion not to allow the filing of the affidavit. Therefore, there is no basis to interfere
28 Id at paras 85-6.
29 National Coalition for Gay and Lesbian Equality v Minister of Home Affairs [1999] ZACC 17; 2000 (2) SA 1
(CC); 2000 (1) BCLR 39 (CC) at para 11.
30 James Brown & Hammer (Pty) Ltd (Previously Named Gilbert Hamer & Co Ltd) v Simmons, N.O. 1963 (4) SA
656 (A).
31 Id at 660E-G.
32 Id.
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with the discretion of the High Court when it refused Seebed’s request to file the
supplementary answering affidavit.
[43] The finding that the High Court did not err in rejecting the supplementary
answering affidavit also has implications for the determination whether the High Court
should have stayed the second eviction proceedings pending the determination of the
first eviction proceedings. This was the crux of Seebed’s lis pendens defence. Thus,
the next issue to be determined is whether the High Court erred in rejecting Seebed’s
lis pendens defence.
[44] In AMCU,33 this Court recognised that lis pendens is intended to prevent
duplication of legal proceedings. It held—
“once a claim is pending in a competent court, a litigant is not allowed to initiate the
same claim in different proceedings. For a lis pendens defence to succeed, the
defendant must show that there is a pending litigation between the same parties, based
on the same cause of action and in respect of the same subject matter. This is a defence
recognised by our courts for over a century.”34
[45] Furthermore, in Caesarstone,35 the Supreme Court of Appeal said—
“the requirement of the same cause of action is satisfied if the other proceedings involve
the determination of a question that is necessary for the determination of the case in
which the plea is raised and substantially determinative of the outcome of that latter
case . . . [the requirement o f] the same cause of action and that the same thing be
claimed, must not be understood in a literal sense and as immutable rules. There is
room for their adaptation and extension based on the underlying requirement that the
same thing is in issue as well as the reason for the existence of the plea.”36
33 Association of Mine Workers and Construction Union v Ngululu Bulk Carriers (Pty) Ltd (in liquidation) [2020]
ZACC 8; 2020 (7) BCLR 779 (CC).
34 Id at para 26.
35 Caesarstone Sdot-Yam Ltd v World of Marble and Granite 2000 CC [2013] ZASCA 129; 2013 (6) SA 499
(SCA).
36 Id at para 21.
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[46] Generally, it would have been improper for the High Court to have determined
the s econd eviction proceedings whilst the earlier proceedings were pending if the
defence was applicable. However, in the present matter, it was not. The basis for this
conclusion is that Seebed’s invocation of lis pendens was based on the submission that
the issues to be determined, namely the legitimate expectation that the agreement would
be extended and the unfair or unreasonable contractual practices, in the first and second
eviction proceedings, were the same. This argument has no merit because Seebed had
never pleaded these issues before the High Court in the second eviction proceedings
during the pleading stage, and the supplementary answering affidavit, through which it
sought to introduce these issues, was not accepted. On that premise, the issues to be
determined in both the first and second eviction proceedings were not the same.
[47] In addition, even if Seebed had pleaded these issues during the pleading stage of
the second eviction proceedings, the issues were only introduced in the first eviction
proceedings through a supplementary answering affidavit, which was filed after close
of pleadings had been reached in the second eviction proceedings. Thus, the High Court
would still not have been seized with two cases that were premised on the same issues
and based on the same cause of action. Therefore, the defence of lis pendens would
have been inapplicable. Consequently, in the light of the facts and evidence before it,
the High Court correctly rejected Seebed’s lis pendens defence and was entitled to
adjudicate the second eviction proceedings.
[48] The next question is whether the High Court erred in granting the order of
eviction. In reaching its decision, the High Court effectively accepted the submission
advanced by Engen, that the agreement that subsisted between Seebed and Engen at the
time of launching the second eviction proceedings was on a month -to-month basis.
Before the High Court, Seebed did not deny that its concession that the agreement which
subsisted between it and Engen was on a month -to-month basis . However, Seebed
submits that this concession, which was made during the first eviction proceedings, was
a concession of law and not of fact.
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20
[49] In Matatiele,37 this Court held that “[i]t is trite that this Court is n ot bound by a
legal concession if it considers the concession to be wrong in law” .38 In Kruger,39
this Court stated that concession s of fact will generally be accepted without further
deciding on the issues, as such concessions have the effect of not placing the conceded
facts in dispute.40 It further held that the “rule extends to legal concessions but only to
the extent that a court is satisfied that a concession was properly made” and where legal
concessions are improperly made, the Court may reject them. In Dengetenge,41 this
Court held that “a concession made by counsel on a point of law may be withdrawn if
the withdrawal does not cause any prejudice to the other party”. 42 By necessary
implication, concessions of fact will be binding.
[50] In the present matter, Seebed expressly accepted that the subsequent agreement
that had been entered into by the parties, to effectively truncate the lease agreement to
2015 with the intention of later concluding another agreement which would terminate
in 2020, had been tainted by misrepresentation. And on that basis, the lease agreement
reverted to a month -to-month arrangement between the parties, as expressly provided
for in the original lease agreement. Seebed’s concession that the lease was terminable
on one month’s notice was unqualified by the unfairness and reasonableness standard.
From the wording of Seebed’s concession, it is clear and unequivocal that Seebed
conceded to a state of affairs that subsisted between the parties. Naturally, this
constitutes a concessi on of fact and not of law. And it was on this very basis that a
37 Matatiele Municipality v President of the Republic of South Africa [2006] ZACC 2; 2006 (5) SA 47 (CC); 2006
(5) BCLR 622 (CC).
38 Id at para 67.
39 Kruger v President of Republic of South Africa [2008] ZACC 17; 2009 (1) SA 417 (CC); 2009 (3) BCLR 268
(CC).
40 Id at para 102. See also S v Hadebe [1997] ZASCA 86; 1998 (1) SACR 422 (SCA) at 426A -B, where the
Supreme Court of Appeal held that “in the absence of de monstrable and material misdirection by the trial court,
its findings of fact are presumed to be correct and will only be disregarded if the recorded evidence shows them
to be clearly wrong”.
41 Dengetenge Holdings (Pty) Ltd v Southern Sphere Mining and Dev elopment Company Ltd [2013] ZACC 48;
2014 (5) SA 138 (CC); 2014 (3) BCLR 265 (CC).
42 Id at para 55.
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21
resolution of the allegations of fraud in the first eviction proceedings raised factual
disputes requiring a referral to oral evidence . Engen’s case was that Seebed’s refusal
to sign the franchise agreement was a breach of the extension agreement, but Seebed
claimed that there was no breach because the extension agreement was vitiated by fraud,
resulting in a month-to-month lease. Therefore, the High Court in the second eviction
proceedings was correct in concluding that, on the strength of Seebed’s version, the
parties were engaged in a month -to-month contract, which Engen was entitled to
terminate on a month’s notice.
[51] During the second eviction proceedings, Seebed submitted that it exercised its
election to stand by the agreement, notwithstanding that it was tainted by
misrepresentation. It is on this basis that Seebed advances that it was, at the very least,
entitled to remain in occupation of the property until 31 July 2017. Even on the strength
of this version – which was a volte face from the basis on which it had avoided an
adjudication of the first eviction proceedings on the papers – the High Court was still
correct in its conclusion that, at best, Seebed m ay have had a right of occupation until
31 July 2017. Further, the High Court bolstered this position by making the order of
eviction on 31 July 2019, with effect from 31 July 2017, as opposed to the cancellation
dates stipulated by Eng en in both the firs t and second eviction proceedings. This
decision was favourable to Seebed. In the light of the cumulative factors and Seebed’s
conduct during the proceedings, specifically its attempt to introduce allegations of
unfair and unreasonable contractual practices at a very late stage of the proceedings, the
High Court cannot be faulted for its decision. On that premise, the High Court’s order
evicting Seebed was correct.
[52] Furthermore, Seebed has made the allegation that, since Engen had made the
undertaking that the lease period would be extended for another period of five years
ending in 2020, Seebed had a reasonable expectation that the lease agreement would be
extended and thus had a right to remain in occupation of the leased premises until
July 2020. This allegation was not raised by Seebed during the second eviction
proceedings – disregarding the second supplementary answering affidavit which the
MHLANTLA J
22
High Court refused to receive – and consequently, the High Court could not have been
in a position to consider this. Even if Seebed had timeously and effectively placed its
allegations of its right to remain in occupation of the leased premises until July 2020,
the High Court would have not been in a position to find in favour of Seebed, as doing
so would have require d a resolution of the question left open in Former Way Trade43
and the High Court to make a finding that is contrary to the “whole agreement” clause
contained in the original lease agreement.
[53] The next issue is Seebed’s submission that it is entitled to sell the service station
if the eviction is granted, as provided for in clause 41 of the lease agreement. Clause 41
provides that if Engen terminates the lease agreement before its expiry, Seebed will not
have the right to claim compensation. Through this clause, Engen reserves the right to
appoint a new dealer, with whom Seebed may negoti ate terms concerning the
taking-over of property belonging to Seebed located on the leased premises. Seebed
may also elect to remove such property from the leased premises when the termination
takes effect.
43 In Former Way Trade above n 22 at para 41, this Court held:
“The High Court held that the arbitrator has the power to determine whether the contractual
practice was unfair or unreasonable and to correct it. It said that the Petroleum Products Act,
unlike the Labour Relations Act, does not grant a section 12B arbitrator the explicit power to
reinstate a lapsed agreement. Although it did not determine whether the arbitrator’s powers
went so far as to permit them to make a new contract for the parties, it held that this was unlikely,
considering the principle of freedom of contract.”
See also Crompton above n 21 at para 52, wherein this Court held:
“In this matter, this Court is not required to make a definiti ve finding on the precise scope of
the corrective powers of a section 12B arbitrator and whether she may extend a lapsed
agreement in making an ‘award as she deems necessary to correct such [unfair or unreasonable]
practice’. I do, however, caution courts against making stay decisions based on premature
assessments of what the section 12B arbitrator (or any arbitrator) would or would not decide.
Prospects of success, so to speak, before the arbitrator should not be given undue weight in the
analysis.”
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23
[54] This issue was raised for the first time in this Court . It is not in the interests of
justice for this Court to determine the issue or its implications as, in doing so, we would
be a Court of first and last instance. In Tiekiedraai,44 this Court said:
“This Court cannot be taxed to consider novel points not raised before simply because
of its position as a super-appellate body over all other courts. Generally speaking, apart
from its power t o afford direct access, this Court’s appellate powers exist not to
determine novel issues raised for the first time before it, but to intervene in and correct
determinations by lower courts.”45
[55] What remains is Seebed’s contention that the granting of the e viction order in
the second eviction proceedings has precluded it from raising any of its defences in the
first eviction proceedings. This is based on the fact that a decision to reject these
defences has already been taken by the High Court in the second eviction proceedings,
and the common relief sought by Engen has already been granted. In essence, the order
of eviction effectively extinguishes the basis and cause of the first eviction proceedings,
thereby rendering the referral to trial and any order granted thereof meaningless.
[56] This Court would not be in a position to take the matter any further, considering
the finding that the High Court did no t err in granting the eviction order effectively
renders the first eviction proceedings moot. Any further finding on this aspect would,
in earnest, be purely academic. In truth, the question whether Engen lawfully cancelled
the lease fo r breach in November 2011 , being the subject of the first eviction
proceedings, was rendered academic once Engen instead relied on a termination on
notice in May 2016, and once the High Court – in a decision which Engen has not
challenged – chose to order eviction only retrospective to 31 July 2017.
44 Tiekiedraai Eiendomme (Pty) Limited v Shell South Africa Marketing (Pty) Limited [2019] ZACC 14; 2019 (7)
BCLR 850 (CC).
45 Id at para 24. See also Mans v Mans [2020] ZACC 9; 2020 (8) BCLR 903 (CC) at paras 36-8; Everfresh Market
Virginia (Pty) Ltd v Shopri te Checkers (Pty) Ltd [2011] ZACC 30; 2012 (1) SA 256 (CC); 2012 (3) BCLR 219
(CC) at para 50; Bruce v Fleecytex Johannesburg CC [1998] ZACC 3; 1998 (2) SA 1143 (CC); 1998 (4) BCLR
415 (CC) at para 8; and Transvaal Agricultural Union v Minister of Land Aff airs [1996] ZACC 22; 1997 (2) SA
621 (CC); 1996 (12) BCLR 1573 (CC) at para 18.
MHLANTLA J
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Conclusion
[57] For all these reasons, the application must fail on the basis that it is not in the
interests of justice to grant leave to appeal. The ordinary principle that costs follow the
result applies.
Order
[58] The following order is made:
1. Leave to appeal is refused.
2. The applicant must pay the respondent’s costs in this Court.
For the Applicant:
For the Respondent:
N Redman SC and F Bezuidenhout
instructed by Ayoob Kaka Attorneys
P L Carstensen SC instructed by
Lanham Love Attorneys